We believe our server products provide customers with advantages in performance, total costs of ownership, and productivity by delivering superior applications, development tools, compatibility with a broad base of hardware and software applications, security, and manageability. In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee. Refer to Note 16 Stockholders Equity of the Notes to Financial Statements for further discussion. Microsoft is a technology company whose mission is to empower every person and every organization on the planet to achieve more. Shares of common stock outstanding were as follows: The following table summarizes the changes in accumulated other comprehensive income (loss) by component: We grant stock-based compensation to employees and directors. We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. SA conveys rights to new software and upgrades released over the contract period and provides support, tools, and training to help customers deploy and use products more efficiently. SMB segment and subsegments. Office Consumer products and cloud services revenue increased $474 million or 10% driven by Microsoft 365 Consumer subscription revenue, on a strong prior year comparable that benefited from transactional strength in Japan. Apple and Microsoft are both great companies to own. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. Price Quote as of 2/17/2023 4:00:00 PM - ET. We regularly review inventory quantities on hand, future purchase commitments with our suppliers, and the estimated utility of our inventory. Sempra Energy's (SRE Quick Quote SRE - Free Report) fourth-quarter 2022 adjusted earnings per share (EPS) came in at $2.35, which beat the Zacks Consensus Estimate of $2.06 by 14.1%. Microsoft was built for this moment. Meanwhile, the company is plowing billions of dollars into its Reality Labs (metaverse) segment despite it generating a mere pittance in terms of revenue. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The financial results of GitHub have been included in our consolidated financial statements since the date of the acquisition. We repurchased the following shares of common stock under the share repurchase programs: Shares repurchased during fiscal year 2021 and the fourth quarter of fiscal year 2020 were under the share repurchase program approved on September 18, 2019. Growth depends on our ability to attract new users, understand intent, and match intent with relevant content and advertiser offerings. As of June 30, 2021 and 2020, our financing receivables, net were $4.4 billion and $5.2 billion, respectively, for short-term and long-term financing receivables, which are included in other current assets and other long-term assets in our consolidated balance sheets. Other reconciling items, net consists primarily of tax credits and GILTI tax, and in fiscal year 2021, includes tax benefits from the India Supreme Court decision on withholding taxes. We record a receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing. The Google Cloud revenue segment generated 9.3 percent of the company's revenues, up from 4.3 percent in 2018. . The following table summarizes the payments due by fiscal year for our outstanding contractual obligations as of June 30, 2021: On April 11, 2021, we entered into a definitive agreement to acquire Nuance Communications, Inc. (Nuance) for $56.00 per share in an all-cash transaction valued at $19.7 billion, inclusive of Nuances net debt. In, Microsoft. Azure faces diverse competition from companies such as Amazon, Google, IBM, Oracle, VMware, and open source offerings. Chief Executive Officer, Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Organizations purchase perpetual licenses and SA is optional. Our growth mindset culture begins with valuing learning over knowing seeking out new ideas, driving innovation, embracing challenges, learning from failure, and improving over time. Marketing Solutions competes with online and offline outlets that generate revenue from advertisers and marketers, and Sales Solutions competes with online and offline outlets for companies with lead generation and customer intelligence and insights. The AeroTech segment's revenues are expected to increase 10-13% from that reported in 2022. . Segment by Type - Asset Tracking and Inventory Management Solutions Market The fifth perspective. Our success is highly dependent on our ability to attract and retain qualified employees. Our segments provide management with a comprehensive financial view of our key businesses. 18,327. Changes to our estimated variable consideration were not material for the periods presented. Gross margin increased $6.5 billion or 18% driven by growth in Office 365 Commercial and LinkedIn, and the change in estimated useful lives of our server and network equipment. We have a strong position with our large and growing highly engaged community of gamers, including the March 2021 acquisition of ZeniMax Media Inc., the parent company of Bethesda Softworks LLC, one of the largest, privately held game developers and publishers in the world. Last year, we intercepted 30 billion email threats and 31 billion authentication attacks. To support this culture, we offer a wide range of learning and development opportunities. We have recast certain prior period amounts to conform to the current period presentation. We built on this pledge by adding commitments to be water positive by 2030, zero waste by 2030, and to protect ecosystems by developing a Planetary Computer. 10,610. us-gaap:OperatingIncomeLoss. RSUs generally vest ratably over a service period of four years. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Date: Tuesday, November 30, 2021 Full-year fiscal '23 estimates today expect Microsoft to earn $9.55 in EPS on $212.2 billion in revenue for expected growth in the next 6 months of 4% in EPS and 7% in revenue. As described in our 2020 Proxy Statement, annual performance and compensation reviews of our senior leadership team include an evaluation of their contributions to employee culture and diversity. At Microsoft, we believe that the economic growth we help drive must reach every person, community, and country. Were seeing our family of products play key roles in the ways the world is continuing to work, learn, and connect. As of June 30, 2021 and 2020, equity investments without readily determinable fair values measured at cost with adjustments for observable changes in price or impairments were $3.3 billion and $1.4 billion, respectively. We will continue to invest in sales, marketing, product support infrastructure, and existing and advanced areas of technology, as well as continue making acquisitions that align with our business strategy. These forward-looking statements generally are identified by the words believe, project, expect, anticipate, estimate, intend, strategy, future, opportunity, plan, may, should, will, would, will be, will continue, will likely result, and similar expressions. This segment primarily comprises: The Windows operating system is designed to deliver a more personal computing experience for users by enabling consistency of experience, applications, and information across their devices. Revenue, classified by the major geographic areas in which our customers were located, was as follows: Revenue from external customers, classified by significant product and service offerings, was as follows: Our commercial cloud revenue, which includes Azure, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other commercial cloud properties, was $69.1 billion, $51.7 billion and $38.1 billion in fiscal years 2021, 2020, and 2019, respectively. Microsoft annual revenue for 2021 was $168.088B, a 17.53% increase from 2020. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. We have operating and finance leases for datacenters, corporate offices, research and development facilities, Microsoft Experience Centers, and certain equipment. To address this, we provide a complete chain of software development tools across every cloud and client platform. Compensation cost for stock awards, which include restricted stock units (RSUs) and performance stock units (PSUs), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service or performance period. We also continue to lead in the fast-growing cloud gaming market. This will give organizations greater flexibility and a more secure way to empower employees to be productive and connected, regardless of their location. This change in accounting estimate was effective beginning fiscal year 2021. That would be the fastest pace for either metric in at least six years. Talent Solutions provide insights for workforce planning and tools to hire, nurture, and develop talent. For Microsoft, trust is built on privacy, security, digital safety, the responsible use of AI, and transparency. The Company designs and maintains accounting and internal control systems to provide reasonable assurance at reasonable cost that assets are safeguarded against loss from unauthorized use or disposition, and that the financial records are reliable for preparing consolidated financial statements and maintaining accountability for assets. Microsoft Research is one of the worlds largest corporate research organizations and works in close collaboration with top universities around the world to advance the state-of-the-art in computer science and a broad range of other disciplines, providing us a unique perspective on future trends and contributing to our innovation. Our Intelligent Cloud segment consists of our public, private, and hybrid server products and cloud services that can power modern business and developers. These programs reinforce our culture and values such as collaboration and growth mindset. Sinai Health System in New York and Kyabirwa Surgical Centre in Uganda have together, Anheuser-Busch InBevthe worlds largest brewerused Azure Digital Twins. And, new Azure Purview offers organizations comprehensive data management and governance to map all their data, whether it resides on-premises, in the cloud, or in software as a service (SaaS) applications. Founder and Chairman, Trilogy We record a receivable related to revenue recognized for multi-year on-premises licenses as we have an unconditional right to invoice and receive payment in the future related to those licenses. Premium Subscriptions enables professionals to manage their professional identity, grow their network, and connect with talent through additional services like premium search. Our platforms and tools help drive small business productivity, large business competitiveness, and public-sector efficiency. Determination of whether products and services are considered distinct performance obligations that should be accounted for separately versus together, such as software licenses and related services that are sold with cloud-based services. Xbox is designed to benefit users by providing access to a network of certified applications and services and to benefit our developer and partner ecosystems by providing access to a large customer base. Interest and dividends income decreased due to lower yields on fixed-income securities. EPS of $1.08 for the same period compares to $0.94 a . Windows 11 builds on the strengths of productivity, versatility, and security on Windows 10 today and adds in new experiences that include powerful task switching tools like new snap layouts, snap groups, and desktops; new ways to stay connected through chat; the information you want at your fingertips; and more. 6,600. Although management currently believes that resolving claims against us, individually or in aggregate, will not have a material adverse impact in our consolidated financial statements, these matters are subject to inherent uncertainties and managements view of these matters may change in the future. Our vision is to create economic opportunity for every member of the global workforce through the ongoing development of the worlds first Economic Graph, a digital representation of the global economy. We issue debt to take advantage of favorable pricing and liquidity in the debt markets, reflecting our credit rating and the low interest rate environment. Land is not depreciated. The largest category of OEMs are direct OEMs as our relationship with them is managed through a direct agreement between Microsoft and the OEM. Price as of February 28, 2023, 12:39 p.m. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Equity investments without readily determinable fair values are written down to fair value if a qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than carrying value. General and administrative expenses include payroll, employee benefits, stock-based compensation expense, severance expense, and other headcount-related expenses associated with finance, legal, facilities, certain human resources and other administrative personnel, certain taxes, and legal and other administrative fees. We provide for the estimated costs of fulfilling our obligations under hardware and software warranties at the time the related revenue is recognized. 4 min read. As of June 30, 2021, 2020, and 2019, we had accrued interest expense related to uncertain tax positions of $4.3 billion, $4.0 billion, and $3.4 billion, respectively, net of income tax benefits. Darling Ingredients (DAR) reported $1.77 billion in revenue for the quarter ended December 2022, representing a year-over-year increase of 35%. Under the Executive Incentive Plan, the Compensation Committee approves stock awards to executive officers and certain senior executives. Deloitte & Touche LLP has audited our internal control over financial reporting as of June 30, 2021; their report follows. 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